Supply Chain Efficiency for All
We recently attended a workshop whose purpose was to understand key distribution issues and challenges within a sector of the UK manufacturing industry and to perhaps suggest new models that would improve cost effectiveness, efficiency and market opportunities.
As international supply chain managers what struck us was the pain being felt by the small producers who were suffering extremely poor service levels and consequent financial losses as a result. These people clearly felt they didn’t have a champion and I would suggest there is a very pertinent message that all of us who manage supply chains and have a vested interest in the prosperity of UK manufacturing ignore at our peril.
Small producers are incredibly nimble and innovative: they respond quickly to the challenges set by their customers and they constantly seek new opportunities for market and product development. In a good number of cases companies are run by a very small number of people but this flat structure enables them to retain flexibility and responsiveness. However, what they lack in a high proportion of cases is any understanding of supply chain management and the in-house skills to ensure that inbound raw materials and outbound finished goods are handled efficiently. Evidence would suggest that a high number retain the in-house transport model for the simple reason that they consider this to be the best (possibly only) way of controlling their own destinies and maintaining the standards of service that their customers demand. If a new/small food producer secures a contract with a large supermarket chain then those of us with long experience in this industry readily recognise the pressures to deliver and it is understandable that companies would rather take transport costs on the chin and shave margins than lose such contracts.
But is there a better way of doing things?
Professor Martin Christopher of Cranfield Institute has been arguing for some time that not only is the supply chain THE competitive element for many businesses but that the most effective model for the post-credit crunch world will have to be strategic collaboration in some form or another. This resonated very well with those assembled at the workshop as securing greater transport efficiency and lower cost (whilst retaining customer service levels) is the new Holy Grail, but the question on everyone’s lips was how to achieve the different scales to cater for both large and small businesses alike. If you refer to our publications section you will find the answer - recently published by the Chartered Institute of Logistics and Transport.
